Canadian Wood Products Magazine

Back to the wood stove?

Commercial forest-based bioenergy may be in its infancy across much of energy-rich Canada, but the 130 plus delegates at the Forest Biomass for Bioenergy and Bio-products Conference held last week in Edmonton, AB were given an idea of exactly where Canada may be one day soon. Gert Andersson of the Swedish forestry research institute Skogforsk described the use of forestry biomass for bioenergy in Scandinavia, measuring forest productivity in terms few this side of the Atlantic ever thought possible - in megawatt hours (MWh) per hectare.

“Right now we are averaging about 1 MWh/ha from post harvest slash, but I think it’s possible to get another 1.5 MWh/ha if we are more aggressive in our harvesting, including stumps,” the forest researcher told a confused audience used to dealing in m³/ha. Yet given the interest among audience members in new lucrative markets for biomass, and recent provincial and federal government initiatives in the billions to promote renewable energy sources, we may all start to measure forest production this way.

Bioenergy, biomass harvesting, bio-refineries – Little of it is new, even in Canada, where George Petty of Repap fame tried launching his Alcell pulp and biomass refinery back in the late 80s. What makes it all possible today is a mix of economic and political incentives: the consistently and seemingly permanent high price of energy and petrochemicals; and the recent explosion in public concern over global warming. Add to this the horrible conditions in traditional pulp and solid wood products, and a mass of deteriorating beetle kill wood coming on stream, and you have a lot of people wondering if there isn’t some money to be made from it all.

Hence the attentive crowd at the two-day Edmonton event, which drew a good mix of government, researchers, industry folks, and bioenergy system suppliers. Chief organizers of the excellent program were Juri Agapow of FERIC, Derek Sidders of the Canadian Forest Service (CFS), and David Patterson of FERIC's biofuels, bioenergy and bio-products program. Patterson is originally with Alberta Sustainable Resource Development, but has been seconded to FERIC to help kick-start its bio-industries work. He was largely responsible for the slate of speakers at the event. 

The first two speakers set the tone by outlining the massive volume of biomass material available, as well as its equivalent in energy terms – MWh or gigajoules. This is in the form of sawmill residue and post-harvest roadside slash in BC, while in the rest of the country roadside slash is the main potential feedstock, as sawmill residues are largely spoken for. Of course BC also has some 15 to 20 years worth of beetle kill wood to consider, immense volumes that are deteriorating faster than expected as far as lumber production goes.

Derek Sidders of the CFS painted a detailed picture of exactly what volume and energy equivalent is available coast-to-coast in Canada. Overall, some 92 million ODT is available each year in Canada, taking into account sawmill residues, roadside slash, urban construction waste, and insect/fire salvage. Add the potential for purpose-grown high-yield biomass, and the future looks even warmer. In the near term, the most promising of these volumes across Canada is logging residues currently left in the bush or burnt at roadside, an astounding 32 million of it already brought as far as the landing each year in Canada. The exception is BC, where unused mill residues are still the lowest fruit.

Nor is the demand wanting. Several provinces, including Quebec, Ontario and BC are actively seeking alternative energy projects, from wind power to bioenergy co-gen projects in an effort to add renewable energy sources to their power mix while meeting the growing need for more electricity. BC Hydro for its part is seeking a host of biomass energy projects to supply 10 MWh or less each to the provincial grid, priced a fair bit higher than the utility’s standard rate. Janice Larson of BC’s Ministry of Energy, Mines and Petroleum Resources spelled out both the general growth in demand across BC, as well as the bioenergy Expressions of Interest due April 17. The province sees growing demand for electricity dovetailing perfectly with under utilized sawmill residues (BC still has almost 50 beehive burners sending bioenergy up in smoke), and an overwhelming supply of deteriorating beetle kill wood.

The technology to harness this power is also available, as several speakers discussed options that varied from large centralized plants to bio-refineries that can be brought right to the woods. Systems discussed or that we ran across can be divided into two basic camps.

Direct burning of biomass in heating and/or co-gen plants. This requires an efficient way to move the feedstock, whether as chips or bundled slash. There is no shortage of existing suppliers of this technology, including Teaford Canada, whose Canadian agent Dan Ledoux participated at the Edmonton event.

Conversion to some form of denser, higher energy value fuel, either using pyrolysis or gasification. The idea is either to allow it to be used to directly replace an existing power source in an established infrastructure (like natural gas at Nexterra’s gasification system at Tolko’s Heffley Creek plant), to compete in higher-end existing oil markets, or to allow shipping of more value per truckload when distance is an issue. For gasification, there are a host of emerging technology suppliers, including Nexterra and Choren, a European company represented by Expander Energy in Canada. For pyrolysis, Dynamotive is perhaps the best known, with two existing projects up and running in Ontario, but other players include Advanced Biorefinery out of Ottawa and Alterna Energy out of BC.

Of course as FERIC's Patterson points out, there is more to biomass than heat, power or oil. Many of today's petrochemicals were originally extracted from our forests, and with rising demand and pricing, the opportunity exists to return to those biorefinery days. In fact, Expander Energy expects its first project to supply hydrogen to the oil sands, an alternative to expensive and diminishing natural gas reserves. Another attractive option is the production of synthetic diesel, or syndiesel, which according to Expander's Ivan Kawulka is both cleaner and higher in cetane than petro diesel, and does not share the cold weather clouding issues of biodiesel. There is a raft of other industrial wood-based products, with the only limitation being price and market.

Not easy street

Despite the supply, demand and technology being largely in place, there are still clearly many challenges to making this new economy work. Not surprisingly, it all comes back to economics:

Delivered cost: Peter Fransham of Advanced Biorefinery made the point best of all when it comes to the potentially devastating cost of collecting and processing forest biomass for bioenergy or bio-refining. With the exception of sawmill residues already on site, “there is no such thing as free biomass,” he told delegates. Obviously, there is a cost to handle and reduce (chip or hog) the feedstock even if it is “free” roadside slash, and then distance to the plant will be the all-important factor in determining whether conversion makes dollars and cents. In the end, energy prices in the market you’re selling to will largely determine economical shipping distance. Fransham sees 100 km one-way as the cut-off point for shipping slash or chips, although existing co-gen suppliers in New Brunswick are already shipping much farther than that to power plants in energy-hungry Maine. Much like incremental power demand in BC, it all comes down to what that last load of chips is worth to the plant manager.

When the slash is too far away for economical hauling, there are options to extract the air and water, densify it, and create more value per truckload. Advanced Biorefinery offers one such solution, using mobile pyrolysis refineries to convert biomass to bio-oil on site, likely in sort yards out in the field. In fact, Advanced has sold one unit to the Ontario MNR, and it will be going to production some time this year. The 50 ton/day system will start off de-bugging in an urban location, and then will move to a remote site to start converting slash.

Another option comes from South Africa, and is handled in Canada by Alterna Energy of Prince George, BC. The process converts biomass into a dense charcoal form that is a readily transferable energy source. The initial focus of this group will be on the readily available mill residue supply in BC, and the province’s tender for small power plants.

Still, if there was one weakness to the conference’s agenda, it was a lack of clear information on production cost for things like roadside slash handling and chipping (or chipping vs hogging), loading/unloading, hauling, etc…The systems were well described and compared by FERIC’s Jack Macdonald, part of an east-west FERIC team looking into biomass, led by Mark Ryans in the east and Tony Sauder in the west. Macdonald noted that costing info is on the way, so stay tuned.

Uncertain markets: What will all this power be worth, and where? Regardless of the supply of biomass in provinces like BC and Quebec, how much margin is there in a market where residential electricity costs are among the lowest in the world, and governments seem keen to keep it that way (both sell residential power for just over six cents per KWh). Yet industrial and residential power are different things, and as BC’s Janice Larson explains, the cost of incremental power is far higher than the core volume of power produced by hydro installations long-since paid for. This allows utilities to pay significantly more for flexible market power, like the 10 MWh or smaller bioenergy projects described earlier.

Opportunities may also exist serving markets with higher power costs. The price range is significant, as again Larson showed in her presentation. Take potential bioenergy or biomass production in Quebec. Sure, residential hydro is just six cents a KWh in La Belle Province, but just a few hundred miles away in Boston are North America’s highest residential electricity rates at over 32 cents. Rates in border states Vermont, New Hampshire, New York, and Maine are also all considerably higher, and demand growing. Sweden again may provide a look at the possible future, where Skogforsk’s Andersson says sawmills are already starting to fight with power plants over biomass, not always winning.

Fibre supply: The real question when it comes to the next best source of biomass – logging residue – is who owns it and what’s it worth sitting at roadside 150 km from town? It’s not an idle question, as provincial governments struggle to come up with policies to deal with this issue, particularly tricky in areas like Ontario with multiple users on the same land base. Yet until this is solved, investment in bioenergy is almost impossible, regardless of government incentives from other departments.

Politics: Bioenergy may make perfect sense as a renewable energy alternative to us in forestry, but don’t take the public for granted. Yes, global warming is the big issue today, and the government will support us on this front. Still, you’d think the same of wind power, yet today in Quebec an aggressive campaign to create 2,000 MWh of wind power is running into strong opposition in the communities where companies are trying to install the turbines. You can also expect strong competition for the greenest thumb by the agri-fuel sector. On this note, Bryce Stokes of the USDA Forest Service R&D division had perhaps the best advice of the conference during his dinner speech. Based on his experience promoting bioenergy down south, he stresses the need to inventory the available biomass, present it in terms of available MWh, gigajoules or litres of oil, and then sell the forest sector as a major, reliable, and very green alternative to petroleum and petroleum byproducts.

Given the need and the potential, it is hard to believe someone won’t drive this new energy market forward, and make some money doing it. The real question may not be if and when, but who? Will it be the struggling forest companies already in place and skilled at handling the remote operations and low-cost harvesting systems? Tight capital and risk aversion are hurdles. Or will it be the existing energy sector, flush with cash and looking to put one foot in the renewable energy sector with an eye to the future? They are already investing in many of the technology suppliers mentioned above. At over US$ 65/barrel for oil and US$ 7.55/MMBtu for natural gas at the hub at the time of writing, there’s money to be made.

Continue to watch this site and Canadian Wood Products Magazine as we follow this potential market.

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